Process cost system Use the ending balances from Problem 12-15A as the beginning balances for this problem. The transactions for the second year of operation (2007) are described here. (Assume that all transactions are cash transactions unless otherwise indicated.)

1. The company purchased $40,000 of direct raw materials and $1,300 of indirect materials.

2. Materials totaling $13,400 were issued to the cutting department.

3. Labor cost was $47,000. Direct labor for the cutting and assembly departments was $22,000 and $20,000, respectively. Indirect labor costs were $5,000. (Note: Assume that sufficient cash is available when periodic payments are made. These amounts represent summary data for the entire year and are not presented in exact order of collection and payment.)
4. The predetermined overhead rate was $0.50 per direct labor dollar.
5. Actual overhead costs other than indirect materials and indirect labor for the month were $14,600.
6. The cutting department transferred $30,000 of inventory to the assembly department.
7. The assembly department transferred $60,000 of inventory to finished goods.
8. The company sold inventory costing $34,000 for $64,000.
9. Selling and administrative expenses were $8,400.
10. At the end of 2007, $300 of production supplies was on hand.
11. Assume that over- or underapplied overhead is insignificant.
Required

a. Record the data in T-accounts.

b. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant.

c. Close the revenue and expense accounts.

d. Prepare a schedule of cost of goods manufactured and sold, an income statement, a balance sheet, and a statement of cash flows for 2007.